CBS may be losing about $400,000 daily because of the blackout in major Time Warner Cable markets, now entering its fourth day — although the total financial blow to the Eye from the spat likely will be minimal, according to Wall Street firm UBS.

The estimate includes lost retrans revenue and a loss of advertising dollars at both the network and CBS local stations, according to UBS. Every two weeks of being dark on TW Cable equals a loss of 1 cent per share, the firm calculated.

On Friday at 5 p.m. Eastern, Time Warner Cable pulled CBS signals for approximately 3 million subscribers, primarily in New York, L.A. and Dallas. The operator also dropped Showtime and three other CBS-owned cablers, while the Eye retaliated by blocking Time Warner Cable broadband subs from accessing full episodes online.

If history is a guide, the standoff should be resolved in less than two weeks, UBS said, although other observers have suggested CBS and Time Warner Cable may not come to terms until September.

“Our view continues to be that consumers have more loyalty to the content rather than the company which is responsible for distribution, and with contracts often running 5+ years, CBS can’t afford to take below-market value given the inability to renegotiate terms,” UBS analysts John Janedis, Jaime Morris and Michael Russo wrote in the Aug. 4 note.

CBS’s estimated daily loss of $400,000 is small coin in relation to the company’s total revenue: In the second quarter, the Eye reported $3.7 billion in revenue and net income of $472 million.

Meanwhile, Time Warner Cable also stands see financial losses mount the longer the feud continues, as disgruntled customers cancel. UBS did not have estimates on the effect of the blackout on the cable operator.

CBS said Sunday that the companies were not actively negotiating. The Eye said Time Warner Cable rejected an offer to extend their previous deal while talks continued, but the cable operator disputed that and claimed it offered CBS a one-year extension.

Prior broadcast and cable blackouts have had limited effect on stock prices, according to UBS. The firm cited Fox’s 15-day outage on Cablevision in 2010, a 28-day blackout of Fox cable channels on Dish Network in 2010, and Viacom’s nine-day blackout on DirecTV last summer as having had little impact on share prices.

As some customers claim to be receiving rebates for Showtime subscriptions, CBS issues a statement claiming the provider is making a play for "more leverage."

by Alex Ben Block

CBS issued a statement Sunday that there are currently no negotiations with Time Warner Cable in their retransmission negotiations dispute which has resulted in thousands of cable customers losing CBS stations and the Showtime pay TV service since Friday evening.

The company noted that before the deadline Friday they did ask TWC to continue talks and keep their content on the air -- but TWC “rejected this request,” according to the network, “and told us they’d have more leverage against us if they took us off their service.”

“This is hardly a sign they care about their customers as they claim," the statement continued. "We remain ready to negotiate in good faith when they are.”

CBS, which ran newspaper ads Sunday in New York and Los Angeles urging angry customers to contact TWC, also pointed out that a caller to Milwaukee's Charlie Sykes radio show said TWC gave $20 off his bill for Showtime as a result of the blackout. The cable provider has noted it will provide rebates to customers of the pay TV services, including Showtime, but not for broadcast channel blackouts, as they say they often shuffle channels.

Asked for a response to the CBS claims on Sunday, TWC released the following statement: “We regret the inconvenience to our customers (and their viewers) and look forward to resolving the situation as soon as possible.”

Might be time to think about taking that rebate and investing in an inexpensive HDTV antenna and cutting the cable. Viewing CBS over-the-air in HD is as good or better than cable. Would at least solve the short term situation and still allow for BB viewing.

UPDATE: Now Time Warner Cable has a response to CBS’ response to TWC’s proposal to offer CBS stations on an a la carte basis: It says ithe effort to revive negotiations was “sincere.” It adds: “We’re disappointed in their lack of responsiveness, particularly to our request for them to quit unfairly blocking the free content available on CBS.com from our Internet customers. We hope they will return to the table to negotiate in good faith on behalf of our customers and their viewers.”

PREVIOUS, 2:32 PM: A more formal response will come later, but here’s CBS’ initial answer to Time Warner Cable’s proposal to offer its O&O stations on an a la carte basis: “Today’s so-called proposal is a sham, a public relations vehicle designed to distract from the fact that Time Warner Cable is not negotiating in good faith. Anyone familiar with the entertainment business knows that the economics and structure of the cable industry doesn’t work that way and isn’t likely to for quite some time. In short, this was an empty gesture from a company that is expert at them.”

PREVIOUS, 12:07 PM: CBS says that it “received Mr. Britt’s ‘offer’ simultaneous with its release to the media. We are formulating our response.”

PREVIOUS, 11:04 AM: Time Warner Cable can offer CBS “on terms of its choosing, with 100% of that price remitted to CBS,” CEO Glenn Britt says in a letter today to CBS chief Les Moonves — the latest effort to resolve the contract impasse that since Friday has left millions of TWC customers unable to watch programming from CBS and Showtime. “This way, rather than our debating the point, we would allow customers to decide for themselves how much value they ascribe to CBS programming.” Since the proposal “is very straight forward, the papers can be completed quickly.” TWC released its news moments before COO Rob Marcus appeared on CNBC for a scheduled interview. He said that a la carte is “the purest way to find out what customers want to pay” for programming. ”It takes us out of the middle of it.” Britt also says that TWC would agree to resume carriage of CBS stations and channels “with the new economics TWC reluctantly agreed to during our negotiations, while employing all the other terms and conditions of our recently expired contracts.” In addition to the carriage proposals, Britt asked Moonves to stop blocking TWC’s Internet customers from watching full episodes of programs on CBS.com. “Regardless of the other issues between us, it is surely beyond the pale for you to subject these Internet customers to blocking of content that is made available for free to all others.” Here’s Britt’s letter to Moonves:

Dear Les, In the interests of getting CBS back on our cable systems today, we write to propose that CBS and Time Warner Cable immediately agree to resume carriage with the new economics TWC reluctantly agreed to during our negotiations, while employing all the other terms and conditions of our recently expired contracts. Although those terms are not ideal to CBS or TWC, and would leave TWC and our customers without the digital rights that CBS has provided to others, since both parties have lived under those terms productively for many years, we believe we should continue to live with them in the interest of restoring CBS immediately for the benefit of consumers. Alternatively, if you are unwilling to agree to this proposal, we would also be willing to resume carriage by allowing CBS to make its stations available on an a la carte basis at a price and on terms of its choosing, with 100% of that price remitted to CBS. This way, rather than our debating the point, we would allow customers to decide for themselves how much value they ascribe to CBS programming. In connection with both of these proposals, we would expect you to allow us to immediately resume carriage of your CBS stations (and other CBS-programming services) on retroactive terms as we work out any necessary details. The extension would be ongoing to make sure consumers are not once again held hostage by CBS during this process. We expect, though, that since each of our proposals is very straight forward, the papers can be completed quickly. Finally, we call on CBS regardless of whether it accepts or rejects our proposals, to immediately cease its blocking of CBS.com content from TWC’s high-speed Internet customers. Regardless of the other issues between us, it is surely beyond the pale for you to subject these Internet customers to blocking of content that is made available for free to all others. This is especially so given that CBS uses free public airwaves to broadcast that content and has public interest obligations that it is plainly flouting. In addition, this conduct is abhorrent in that CBS is using this blocking to punish TWC’s Internet customers across the country, including millions of consumers in cities where we continue to carry CBS on our cable systems through agreements with other CBS-affiliated stations; is blocking customers of other multichannel providers, including Direct TV, with whom CBS has no dispute; and is apparently blocking customers of certain other ISP’s, to which TWC provides wholesale Internet services. We stand ready to speak with you immediately to follow up on these matters.

Time Warner Cable internet customers are smarting from CBS' decision to block them from viewing shows online, but they have at least one supporter in Congress. Senator Ed Markey (D-MA) has written to acting FCC chair Mignon Clyburn, asking her agency to investigate the blackout. The letter, published in full at the LA Times, urges the FCC to help broker a deal between the two companies, which have been feuding over the cost of carrying CBS channels. "I encourage both parties to remain engaged in good faith negotiations," he writes, "and I also request that the Commission take action to bring the parties together so these negotiations can be concluded in an equitable and expeditious manner."

Markey says he's not taking a side in the dispute. But he's "particularly concerned" about reports that CBS won't let Time Warner Cable subscribers watch shows on the web. "A consumer's choice of cable television provider should not be tied to her ability to access internet content that is freely available to other consumers," he writes. "In such instances, consumers lose their freedom to access the Internet content of their choice."

CBS has made no secret of the fact that it's blocking content, but it's denied that it's broken any net neutrality laws — and because it's not an ISP, it's almost certainly correct. But Markey wants the FCC to look into it nonetheless. "This is an anti-consumer result that I urge the Commission to investigate, and I encourage the Commission to actively defend internet freedom and consumer rights," he writes.

Markey isn't the only one concerned that customers are being "caught in the middle" of the dispute. Representative Anna Eshoo (D-CA) has promised to see if legal changes are necessary to prevent future channel blackouts. Earlier this week, Time Warner Cable itself filed a letter to the FCC asking the commission to "make clear that such abusive conduct will not be tolerated by broadcast licensees and their affiliates." Both TWC and advocacy group Public Knowledge suggest that CBS is abusing the privileges that grant it free airspace courtesy of the FCC. "Congress created the retransmission law on which CBS justifies pulling its programming from Time Warner Cable subscribers to protect local broadcasters and local programming — not as a gift to media giants to extort even higher fees," writes Public Knowledge's Harold Feld.

Whether the FCC will act, of course, is another matter. Bloomberg has reported that Chairwoman Clyburn doesn't believe the agency can intervene under current laws, and that rewriting them wouldn't help the present disagreement. Likewise, the FCC's comment to The Verge did not suggest any involvement. "The Commission is disappointed that the respective parties could not reach a retransmission agreement," said an official. "Our primary concern remains with consumers and viewers in the affected markets. We urge all parties involved to resolve this situation as soon as possible."

(Reuters) - More than 3 million Time Warner Cable customers in New York, Los Angeles and Dallas will be blocked from watching golf's Major Championship and other popular shows this weekend if the cable company fails to reach an agreement with CBS to end the week-long blackout.

Neither side showed signs of making any progress on ending the dispute as negotiations continued on Friday.

The top U.S. communications regulator said it is ready to act if CBS and Time Warner Cable do not follow through on negotiating to end the blackout of CBS programming in New York and Los Angeles over Time Warner's cable television service.

The blackout started last Friday when the two companies could not agree on fees that Time Warner Cable pays CBS to carry some local stations owned by the broadcaster in some of the largest U.S. TV markets.

"We will continue to urge all parties to stay and resolve in good faith this issue as soon as possible. However, I will affirm to you that I am ready to consider appropriate action if this dispute continues," said the U.S. Federal Communications Commission Acting Chairwoman Mignon Clyburn.

Clyburn, speaking at a press conference in Washington on Friday, also said she was "really distressed" and "disappointed" by the blackout" and was in touch with both companies.

Time Warner Cable said it agreed with the chairwoman's comments and hopes "CBS soon will come to a reasonable agreement with us that is fair to our customers and their viewers."

CBS said it declined to comment on the remarks.

The FCC probably will not be able end the fight, said David Wittenstein, a communications attorney at the firm Dow Lohnes who has handled similar negotiations between cable companies and broadcasters.

"The FCC has taken a position that it has very limited authority to step in and end an impasse. What the FCC can do as a practical matter is quite limited," he said.

He said the FCC could only get involved if one of the parties files a complaint that says one of the sides is not negotiating "in good faith." The FCC could step in if one side is refusing to meet or not providing good reasons for rejecting offers, for example.

On Thursday, online video streaming services like Netflix Inc and Amazon Inc became a new sticking point in the increasingly acrimonious talks.

BREAKING: Three LA-area plaintiffs have filed a class action complaint on behalf of paying Time Warner Cable subscribers in California over the cable provider’s ongoing blackout of CBS, Showtime, Movie Channel, and KCAL channels. Those networks have been blocked by TWC since its negotiations with CBS fell apart on August 2. In a complaint filed today in Los Angeles Superior Court, TWC customers James Armstrong, Michael Pourtemour, and Vatsana Bilavarn seek subscription fees and charge reimbursements on behalf of potentially several millions of fellow TWC subscribers for monthly subscription fees TWC charged during its continuing CBS/Showtime blackout. The company said after talks broke off early this month that it would offer a credit to subscribers for Showtime and TMC — though not the over-the-air stations — but apparently has yet to do so. The plaintiffs argue that they would not have subscribed to TWC for broadcast and Internet services had they known that channels promised in the provider’s packaging would not be offered, citing Showtime’s critically acclaimed shows Dexter and Ray Donovan and CBS programs including Big Brother, NFL football, and the PGA Championship as desired deal-breakers used in TWC marketing to incentivize subscriptions.

Plaintiffs also argue that no notice was given on or before the August 2 blackout and credits have not been offered by TWC since the blackout began. And because the company continued to sell subscriptions in recent months touting its full pre-blackout cable offerings, the suit alleges TWC is in violation of biz statutes forbidding “any unlawful, unfair, or fraudulent business practices” and that TWC’s treatment of its customers is “immoral, unethical, unscrupulous, oppressive, and substantially injurious.” Claiming unjust enrichment, breach of contract and more, the plaintiffs are demanding a jury trial. They are represented by Daniel Weintraub, James Selth, Blake Lindemann and Elaine Nguyen of Weintraub & Selth in LA.

So as CBS & Time Warner continue to exchange barbs back and forth, CBS & Verizon have come to agreement, and take a dig at Time Warner...

CBS Re-Ups Verizon Retrans Deal, Takes Subtle Digs at TWC

Tony Maglio | The Wrap

CBS and Verizon reached a new three-year agreement Thursday allowing for continued retransmission of CBS programming on Verizon's FiOS TV in multiple markets across the country.

CBS took the opportunity to subtly ding Time Warner Cable, with which it is locked in long, contentious negotiations. A news release noted that the deal covers three major markets -- New York, Los Angeles and Dallas -- where Time Warner has blacked out CBS.

"This deal was reached in a short period of time, and CBS has once again achieved fair value for our over-the-air rights," said Ray Hopkins, president of Television Networks Distribution, CBS Corporation. "Verizon is a distribution partner of growing importance to us that provides excellent service to its expanding number of subscribers, and we are glad that this partnership will continue and grow."

"We've reached this agreement in partnership with CBS for our customers, so that they may continue to enjoy CBS content on FiOS," said Terry Denson, vice president of Video Content and Strategy at Verizon. "Verizon continues to address areas of change where necessary in current policies to better reflect the interests of consumers."

CBS and Verizon also have an existing agreement to carry Showtime Networks and Smithsonian.

(Reuters) - Time Warner Cable Inc is offering free antennas to help customers watch CBS via broadcast signals during a blackout that is in its third week, the cable operator said on Friday.

During the blackout, more than 3 million Time Warner Cable customers in cities such as New York, Los Angeles and Dallas have been unable to watch CBS, and the companies have been unable to reach a new programming deal since their agreement expired in June.

The cable company notified customers on its website and by email that they could ask for basic indoor antennas at their local Time Warner Cable store. It also offered a $20 voucher for customers who want to buy antennas at Best Buy Co Inc.

"All blacked-out broadcast stations remain available over the air, and most households can receive the signals if they have the right equipment," the cable company said.

CBS Chief Executive Leslie Moonves said Thursday that both sides continued to negotiate but that no resolution was in sight. Most analysts expect the two parties to reach a deal by the time the National Football League season kicks off in September.

NEW YORK, Sept. 2, 2013 /PRNewswire/ -- CBS Corporation (NYSE:CBS.A and CBS) and Time Warner Cable and Bright House Networks have reached an agreement for carriage of CBS owned stations on Time Warner Cable systems across the country, as well as Showtime Networks, CBS Sports Network and Smithsonian Channel, it was announced today by representatives for the companies. Programming on all networks will resume at 6:00 PM ET today. Though specific terms of the deal are not being disclosed, the agreement includes retransmission consent, as well as Showtime Anytime and VOD, for CBS stations on Time Warner Cable systems in New York (WCBS and WLYW), Los Angeles (KCBS and KCAL) and Dallas (KTVT and KTXA.)

BREAKING: Time Warner Cable and CBS have settled the ongoing cable war that began August 2 and led to a network blackout of CBS and Showtime channels for TWC subscribers. With the NFL season and U.S. Open semis/finals looming a resolution seemed to be on the horizon as recently as Friday:

NEW YORK- September 2, 2013 – CBS Corporation (NYSE: CBS.A and CBS) and Time Warner Cable and Bright House Networks have reached an agreement for carriage of CBS owned stations on Time Warner Cable systems across the country, as well as Showtime Networks, CBS Sports Network and Smithsonian Channel, it was announced today by representatives for the companies. Programming on all networks will resume at 6:00 PM, ET today. Though specific terms of the deal are not being disclosed, the agreement includes retransmission consent, as well as Showtime Anytime and VOD, for CBS stations on Time Warner Cable systems in New York (WCBS and WLYW), Los Angeles (KCBS and KCAL) and Dallas (KTVT and KTXA.)

The networks and the cable giant ended their acrimonious standoff Sunday after nearly a month of darkness in major markets including New York City, Los Angeles and Dallas. Service should be back by 3 p.m Sunday, the two sides said in a news release.

The agreement is good news for fans of the NFL. CBS is set to begin its pro football broadcasts next weekend. Neither side said as much in the announcement, but it's certain the onset of the enormously popular season was a motivating factor in the deal.

The blackout went into effect Friday Aug. 2 at 5 p.m. ET -- the first time CBS and Showtime allowed their signal to go dark during a retransmission dispute. It affected 3.5 million homes -- nearly a third of Time Warner Cable's subscribers.

The sides had grappled over a handful of issues, and at one point had hammered out agreeable terms on fees -- but negotiations got hung up in CBS' apparent refusal to make its digital assets free to TWC customers. TWC then proposed offering CBS on an "a la carte" basis to cable customers; the network scoffed at the idea.

TMC, FLIX and Smithsonian also went down in the failed negotiations that began after a 2009 agreement expired at the end of June. The deadline was originally July 24, was pushed several times.

The sides exchanged a flurry of barbed press releases as the deadline flew past and beyond, with TWC accusing CBS of refusing to engage in "productive discussion" and "not willing to come to reasonable terms."

CBS maintained that it was vastly underpaid for the bulk of viewers it brings.

"What CBS seeks, and what we always have sought from the beginning, is fair compensation for the most-watched television network with the most popular content in the world. We will not accept less."